Located 204 kilometres (127 mi) north of Marree, South Australia and 313 kilometres (194 mi) south of Birdsville, Queensland the hotel is the only fuel and supplies depot on the Birdsville Track.

Mungaranie stands on the edge of the Sturt Stony, Tirari, Simpson and Strzelecki Deserts, nestled beside the Derwent Creek.

[5] Richard Forbes Sullivan opened a depot and hotel at the present site along the Birdsville track in 1886 to supply shepherds, drovers and travellers.

In 1888 William Crombie took up a block nearby to rest horses and water cattle.

By 1889 Robert Rowe took over the store and in 1901 the government sunk a bore to supply permanent water.